Thursday, August 5, 2010

After Ratan Tata, who? New chief expected by March

A day after Tata Group created a five-member selection committee to find a successor for Ratan Tata, RK Krishna Kumar, a director at Tata Sons Ltd, said the successor is likely to be decided by February-March 2011.

Mr Tata, 72, head of the $70 billion salt-to-software group, who has built the world’s cheapest car Nano and taken the group global, will step down in December 2012.

Post the announcement there is intense speculation going on whether despite the attempt to professinoalise the process the search will end with Ratan Tata's cousin: Noel Tata, currently heading Tata International.

But sources within the Tata Group insist that the process will be completely neutral.

Sources say that Noel is not naturally in a line to succeed but added that the candidate must also be seen as willing to 'imbibe Tata ethos'. In the past similar committees have been used by Tata group companies for nominating independent directors or selecting CEOs.

The Board of Tata Sons Ltd on Wednesday formed a selection committee comprising five members, including an external member for eventually deciding on a suitable successor to Ratan N Tata. The composition of the committee is largely in house: members of Sir Dorbaji Tata trust and Sir Ratan Tata Trusts, the holding company of Tata Sons.

But experts say that the Tata's struggles to integrate their overseas expansions, makes the case stronger for an international CEO as the replacement.

Yet the mystique of the Tata surname may be hard to overcome.

Ratan Tata himself is not part of the search panel – he willl advise it from time to time. But he leaves behind a towering legacy: both corporate, and personal, one that will make the search for a successor, not an easy task.

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